CATARC report - June 2015: New Energy Vehicle trends in China

Sharp growth in May 2015 production, 1% of all passenger cars made were electric

2015/07/14

Production volumes in China (Summary)

This report is based on a report by Beijing CATARC Automotive Technology Development Company*; MarkLines has edited and translated the company's report to prepare this report. Click here for a list of CATARC reports.

Fig. 1 Production volume of electrified vehicles (Jan. to May 2015)

Production volume of electrified vehicles in May 2015 in China increased by 101.9% month-over-month (m/m) and by 3.2-fold year-over-year (y/y) to 21,032 units (700 vehicles equipped with lead-acid batteries were included). Production volume for the month had significantly increased. Production volume of new energy vehicles (electric vehicles [EV] and plug-in hybrid vehicles [PHVs]) that were not equipped with lead-acid batteries was 19,794 units, almost reaching 20,000 units. The vehicle with the highest y/y growth rate was the electric bus (same as the previous month). The vehicle with the highest m/m growth rate was the passenger PHV. Production volume of new energy passenger cars was 15,288 units (EVs, PHVs, and vehicles equipped with lead-acid batteries were excluded), exceeding the milestone of 10,000 units. The production volume accounted for 0.9% of the production share for passenger cars in May.

Production volumes in China

Table 1 Production volume of electrified vehicles by vehicle type in May 2014 / Jan. to May 2015

Type

May 2014

Jan. 2015

Feb. 2015

Mar. 2015

Apr. 2015

May 2015

y/y (%)

m/m (%)

Plug-in hybrid passenger cars

1,061

2,281

1,661

3,315

1,523

4,932

364.8

223.8

Plug-in hybrid buses

1,007

871

694

802

956

1,512

50.1

58.2

Electric passenger cars

2,854

2,797

2,207

7,828

5,437

10,992

285.1

102.2

Electric buses

301

1,154

659

1,981

1,457

2,369

687.0

62.6

Special-purpose electric vehicles

125

273

156

457

480

689

451.2

43.5

Hybrid passenger cars

710

800

525

34

555

520

-26.8

-6.3

Hybrid buses

467

1

1

0

0

18

-96.1

-

Fuel cell passenger cars

0

0

0

0

10

0

-

-100

Total

6,525

8,177

5,903

14,417

10,418

21,032

222.3

101.9

Table 2 Production volume of electrified vehicles by vehicle type in May 2015

Plug-in hybrid vehicle (PHV)

Production volume of PHVs in May 2015 was 6,444 units. Production volume of passenger PHVs was 4,932 units, which accounted for 77% of the total PHV production share in May. Four automakers produced passenger PHVs in May. Production volume for the BYD Qin almost reached 4,000 units, which was twice the production volume from six months ago. BYD is shifting its major models for passenger car production to PHVs. Geely Holding Group’s Volvo placed third.

Production volume of PHV buses was 1,512 units, which accounted for 23% of the total PHV production share. 14 bus makers produced PHV buses in May. The top five bus makers were Zhongtong, Yutong, CSR, King Long and Suzhou King Long Bus. Production volume for the bus maker that placed first did not even reach 400 units. Total production volume for the top five bus makers accounted for 77.5% of the total PHV bus production share. Production concentrated on a few bus makers.

Electric vehicle (EV)

Production volume of EVs in May 2015 was 14,050 units (636 passenger EVs and 64 special purpose vehicles, both equipped with lead-acid batteries, were included). Production volume of passenger EVs was 10,992, which marked a record high for a single month in 2015. 12 automakers produced passenger EVs in May. The number of automakers declined by two compared to that of the previous month. The top five automakers were Zhejiang Geely, Hunan Jiangnan Automobile, BYD、Beijing Automotive Industry Holding Co., Ltd., and JAC. Production volume of the top five automakers accounted for over 94% of the passenger EV production share. The Chery eQ dropped from the top five for production volume.

Production volume of EV buses was 2,369 units. 28 bus makers produced EV buses in May. The top five bus makers were Zhengzhou Yutong, Jiangsu Joy Long, Sunwin, Zhongtong Bus, and Nanjing King Long Bus. Jiangsu Joy Long ranked in the top five for the first time. Jiangsu Joy Long’s EV bus, HKL6600BEV, is equipped with an iron phosphate lithium-ion battery and the cruising range of the bus is 150 km. 216 units were produced in May.

Production volume of EV special-purpose vehicles was 689 units. 15 vehicle makers produced EV special-purpose vehicles in May. The top three vehicle makers were Shangdong Tang Jun Ouling, Chongqing Ruichi Automobile, and Fujian New Longma Motor (vehicle makers that produced vehicles equipped with lead-acid batteries were excluded). EV special-purpose vehicles that were equipped with lead-acid batteries accounted for 9.3% of the production share for EV special-purpose vehicles, which was a significant decrease from April.

Electrified vehicle import

All of the electrified vehicles that were imported in May 2015 were passenger cars. The number of electrified vehicles that were imported decreased by 43% m/m to 1,042 units. There was no significant change to the maker and model from April. Of the vehicles that were imported, 830 units were HVs (placed first), 17 units were PHVs (BMW i8 PHVs only), and 195 units were passenger EVs (decreased by 62.4% m/m). Tesla Motors continued to place first for the import of EVs. Tesla Motors EVs accounted for 86.7% of the import share for EVs. The number of BMW i3 EVs that were imported was 22 of which 9 units were range extender vehicles. Major HVs that were imported were by Toyota. The number of Toyota HVs that were imported was 713 units, which accounted for 86% of the import share for HVs. Porsche HVs placed second to Toyota HVs.

Trends in China

MIIT introduces development plan for new energy vehicles and smart connected cars, aims for sales volume of 3 million units for Chinese-brand new energy vehicles by 2025

The State Council of the People's Republic of China introduced “Made in China 2025”plan on May 19, 2015. This is the first 10-year strategic plan for China to become a manufacturing power. Energy-efficient vehicles and new energy vehicles are included in the plan. The Ministry of Industry and Information Technology (MIIT) disclosed the details of “Made in China 2025” on May 22.

In the plan, the Chinese government aims for a sales volume of 3 million units for Chinese carmakers' own-brand new energy vehicles by 2025. The government also plans to increase the market share of these vehicles in China to 80% or more. Regarding smart connected cars, automated driving technologies will be acquired and systems will be built for in-house development and production by 2025.

EV and PHV

1. Progress of industrialization: The Chinese government aims for a sales volume of over 1 million units for Chinese automakers' own-brand EVs and PHVs with a market share of 70% or more in China by 2020. The government also aims for a sales volume of 3 million units for world-class new energy vehicles with a market share of 80% or more in China by 2025.

2. Improvement of competitiveness: Popular models will be produced and they will be ranked in the world’s top 10 for vehicle sales by 2020. Many new energy buses will be exported from China. Two Chinese vehicle makers will be ranked in the world’s top 10 for vehicle sales by 2025. Overseas sales ratio will be 10%.

3. Enhancement of parts: Major parts, such as drive motors and batteries, of world-class will be produced by 2020. Market share of these parts will be 80% in China. Many of these parts will be exported from China by 2025.

4. Smart connected cars: Smart connected cars, such as vehicle-to-vehicle (V2V), will be developed by 2020. These cars will start running in model districts by 2025.

FCV

1. Localization of major materials and components: Major materials used for fuel cell vehicles (FCVs) will be mass produced in China and capabilities to manage the quality of these materials will be established by 2020. Major materials and parts of high-quality will be localized and supplied by 2025.

2. Improvement of performances of fuel cell stacks and vehicles: Fuel cell stack life will be extended to 5,000 hours and output density will be over 2.5 kW/L. Other improvements to vehicles will be made as follows: vehicle durability of 150,000 km, cruising range of 500 km, hydrogen filling time of 3 minutes, and cold start temperature of -30 ℃ or below. These improvements will be made by 2020. Reliability and fuel efficiency of fuel cell systems will be improved by 2025. By doing so, a constant level of competitiveness in the market will be sustained and these systems will be mass produced.

3. Prevalence of FCVs: 1,000 FCVs will be produced and trial runs will be conducted by 2020. Infrastructure for producing and supplying hydrogen will be built by 2025. FCVs will also start running on a small-scale.

Energy-efficient vehicle

Fuel efficiency of new passenger cars (including new energy passenger cars) will be improved to 5 L/100 km by 2020 and 4 L/100 km by 2025. Fuel efficiency of new commercial vehicles will be improved to a level that is close to world class by 2020 and it will reach world-leading level by 2025.

Smart connected car

Core technologies, such as Advanced Driver Assistance Systems, will be established by 2020. Systems for in-house development and production in the early phase will also be built. Core technologies, such as automated driving, will be established by 2025. Systems for in-house development/production and industry clusters will be built for smart connected cars.

On June 4, 2015, MIIT and the National Development and Reform Commission of the People's Republic of China introduced the “management provisions for new passenger EV makers.” They will implement the provision from July 10, 2015. New passenger EV makers will need to meet strict requirements.

First, EV makers must be registered in China. As for the technical aspects, EV makers will need to have technical experience, ranging from designing vehicle designs and structures to developing prototype vehicles, conducting vehicle tests, and making decisions on final drawings. EV makers will also need to own core technologies, such as vehicle control systems, power battery systems, vehicle integration, and vehicle weight reduction, and have the capability to conduct tests, such as validation tests, on these core technologies. They must also acquire intellectual property rights and associated patents for passenger EVs.

As for prototype vehicles, EV makers must build at least 15 prototype vehicles of the same design. In addition, they must meet technical requirements for prototype vehicles. On one charge, cruising range of the vehicles must be at least 100 km, maximum speed of the vehicles must be over 100 km/h, acceleration time from 0 to 50 km/h must be within 5 seconds, etc. Furthermore, EV makers must establish sales systems and after-sales services.

On May 18, 2015, the Ministry of Finance of the People's Republic of China (MOF), State Administration of Taxation of the People's Republic of China, and MIIT announced that “energy-efficient vehicles/new energy vehicles and vessels would be exempt from vehicle and vessel tax.” Vehicle and vessel tax for energy-efficient vehicles/vessels will be reduced by half. New energy vehicles/vessels will be exempt from the tax.

However, the following on tax exemption must be noted.

1. PHVs and commercial EVs/FCVs are exempt from the vehicle and vessel tax. Passenger EVs/FCVs are not subject to the exemption because vehicle and vessel tax for these vehicles are non-taxable. In addition, cruising range of EVs must reach the criteria that have been set by the Chinese government.

2. Secondary batteries must be batteries other than lead-acid batteries. Low-speed EVs that run on a lead-acid battery are not subject to the criteria.

3. Owners of new energy vehicles (either local or import) that meet the criteria just have to submit an application and have it approved by MIIT to have their vehicles be exempt from the tax.

4. Before the policy was introduced, some new energy vehicles were already subject to the exemption from the vehicle and vessel tax. Owners of these vehicles can also apply for tax exemption. New energy vehicles that are purchased after May 18 must meet the criteria for tax exemption to be exempted from the vehicle and vessel tax.

Chinese government revises current fuel subsidy policy for city and public buses, provides subsidies up to CNY 80,000 for new energy public buses

On May 14, 2015, MOF, MIIT, and the Ministry of Transport of the People's Republic of China introduced “the revised fuel subsidy policy for city and public buses and the acceleration policy for the prevalence of new energy public buses.” The Chinese government adjusted the current fuel subsidy amount for public buses. The government also determined the subsidy amount for new energy public buses. Annual subsidies per new energy public bus are as follows: up to CNY 80,000 for EVs, up to CNY 40,000 for PHVs, up to CNY 60,000 for FCVs, and up to CNY 20,000 for non-PHVs that are equipped with a super capacitor.

On June 9, 2015, the Shanghai municipal government introduced the “interim management provisions on the construction of electrified vehicle charging facilities in Shanghai.” If an electric vehicle user decides to install a charging facility on a parking space of which the individual has property rights, the property management company must cooperate with the installation. In addition, if residential areas are to be newly constructed, some space to install charging facilities must be made available. The amount of space required is at least 10% of the entire parking space.

Beijing City: passenger EVs released from traffic regulations from June 1

From June 1, 2015, passenger EVs with a Beijing license plate will be exempt from traffic regulations during rush hour on weekdays.

According to a department within the Beijing Traffic Management Bureau (BTMB), it defines passenger EVs as passenger cars that run on motor drive which uses a secondary battery as its sole source of power. For a passenger EV to be exempt from traffic regulations, the vehicle must be identified as an EV in the vehicle registration certificate. Vehicle type information is not available in vehicle registration certificates that were issued before September 1, 2014 for EVs (excluding EV taxis). Thus, the car owners are required to apply for a new vehicle certificate that identifies the vehicle as an EV, and the certificate needs to be issued before June 1.

Beijing City: government pays subsidies up to CNY 50,000 to taxi companies that purchase EV taxis

On April 29, 2015, the People's Government of Beijing Municipality announced that it would “provide incentives to taxi companies that scrap their old taxis ahead of schedule or replace them with new EV taxis.” By providing incentives, the government aims to encourage taxi companies to replace their old vehicles with EVs. If a taxi company replaces its old vehicle with a new EV, the taxi company will receive up to CNY 50,000 (apart from subsidy) from the central and local governments.

Guangzhou City: government provides subsidies up to CNY 3 million for construction of charging stations

On May 30, 2015, the Guangzhou Industry and Information Technology Commission and the Bureau of Finance of Guangzhou Municipality introduced the “construction fund management law for electrified vehicle charging facilities in Guangzhou City.” The government will provide subsidies of up to CNY 3 million per charging station. Charging facility buildings built above the ground, charging equipment (such as charging poles [chargers]), and accessory equipment for connecting power supplies are subject to subsidies. Subsidies are not provided for land. The Guangzhou municipal government will pay for 30% of the cost for the construction of charging stations but the amount must not exceed the upper limit of the various subsidies.

Shanxi Province: government enacts details of subsidies for new energy vehicles, provides subsidies of CNY 20,000 for EVs

On May 12, 2015, the Shanxi provincial government announced that it would temporarily make subsidies available for the sale of new energy vehicles. Vehicle makers that produce new energy vehicles in Shanxi Province can receive subsidies after the sale of their vehicles. Those who purchase new energy vehicles can purchase the vehicles at reduced prices. Subsidy amount will be subtracted from the sales price of the vehicles.

Qinghai Province: government introduces plan for prevalence of new energy vehicles

On May 14, 2015, the Qinghai provincial government introduced the “plan for the prevalence of new energy vehicles.” The government plans to turn Xining City into China’s model city for new energy vehicles through the production of new energy vehicles and lithium-ion batteries in the city. The government also has set a prevalence target of 5,000 new energy vehicles. To meet this target, the government will install an additional 2,000 chargers.

Xiamen City: government provides subsidies to those who purchase new energy vehicles

On May 4, 2015, the Xiamen Economy & Information Technology Bureau and the Xiamen Municipal Bureau of Finance announced that the government would provide “subsidies for the prevalence of new energy vehicles in Xiamen City.” Implementation period is from January 1, 2014 to December 31, 2015. The Xiamen municipal government will pay the same amount of subsidies as the central government to those who purchase new energy vehicles. In addition, the government will provide subsidies to companies that build charging facilities. The government will pay for 20% of the cost. Companies that build charging facilities for public buses can receive subsidies amounting to 40% of the cost from the government.

GAC launches new Trumpchi EV

Guangzhou Automobile Group Co., Ltd. (GAC) is currently selling the Trumpchi GA5 range extender EV. GAC will launch range extender EV sedans (A- and B-segments) and an EV SUV (A-segment) by the end of 2015 to 2016.

According to the Automotive Engineering Institute of Guangzhou Automobile Group Co., Ltd., GAC is currently developing a next-generation range extender EV. GAC is improving the power and fuel efficiency by reducing the weight of the vehicle. Price range of the vehicle will be lower than that of the first-generation Trumpchi range extender EV. By lowering the price, GAC will further enhance the competitiveness of the vehicle.

Lifan introduces concept of new energy vehicle industry chain

In May 2015, Lifan Industry (Group) Co., Ltd. announced that it would invest CNY 5.2 billion to build an advanced new energy vehicle industry chain. The company will develop power stations, lithium-ion battery cells, motor control unit, transmissions, and new platforms. Lifan has currently acquired many core technologies, such as low-voltage EV powertrains (PEASBlue), high-voltage EV powertrains (APECBlue), hybrid and plug-in hybrid powertrains that were developed by the company, production of ternary lithium-ion battery cells, assembly and management of ternary lithium-ion battery modules and packs, automated manual transmissions (AMTs), new materials for weight reduction, virtual instrument panels, Internet of Vehicles (IoV), and Internet of Things (IoT).

Lifan and Alibaba ties-up and launches power station business

On June 1, 2015, Lifan announced that it has formed a business alliance with Alibaba and its affiliates in the areas of auto sales and finance, sales activity, after-sales service, and international business. The alliance has taken effect from June 8, 2015.

Both companies want to help accelerate the expansion of new energy vehicles through the prevalence of power stations, mainly where batteries of vehicles will be replaced. The construction of charging facilities is not proceeding and the charging time for vehicles to be charged is long. They are acting as obstacles for the expansion of new energy vehicles. To change the current situation and help aid the expansion, the companies are installing power stations. Ternary lithium-ion batteries that Lifan produces will be charged during the night at the power station. Users can have their batteries replaced with charged ones during the day. Batteries will be leased to lessen the burden on the users. By using the patented battery exchange technology, batteries can be replaced in 3 to 5 minutes. Users are only responsible for the battery lease and electricity fees. Maintenance of the batteries will be taken care of at the power station. Average lease and electricity cost per 100 km is cheaper by 30% or more compared to fuel costs for which the users will be paying. Thus, users will be able to significantly cut down on costs.

BDNT plans to launch new DENZA

On May 25, 2015, the marketing officer of Shenzhen BYD Daimler New Technology Co., Ltd. (BDNT) announced that the company had plans to launch a new DENZA at the DENZA Owner's meeting which was held in Beijing City.

The current DENZA is equipped with a lithium iron phosphate battery and the cruising range of the vehicle is 300 km. The cruising range of a competing model, the Tesla Motors Model S, is 420 km, which the DENZA has not reached. BDNT will equip a manganese phosphate lithium-ion battery on the new DENZA to improve the cruising range to at least 400 km.

Broad-Ocean Motor acquires Shanghai Edrive

On June 2, 2015, Zhongshan Broad-Ocean Motor Co., Ltd. announced that it would purchase Shanghai Edrive Co., Ltd. by acquiring all of the company’s shares for CNY 3.5 billion. Shanghai Edrive is the largest maker of drive motor systems for new energy vehicles in China.

Broad-Ocean Motor has launched three businesses: household appliance motors, new energy vehicle drive motors, and automotive motors. However, the company’s new energy vehicle motor business is growing at a sluggish pace. The company aims to increase its market share in the new energy vehicle business through this acquisition.

The China Automotive Technology & Research Center (CATARC) is affiliated with the State-owned Assets Supervision and Administration Commission of the State Council (SASAC). CATARC assists the government in such activities as formulation of auto standards and technical regulations, product certification testing, quality system certification, industry planning, policy research, information services, and common technology research.The Energy-Saving and New Energy Vehicle Network information service provided by CATARC offers timely information on energy saving and new energy sources, and has functions that include marketing and technology consulting, research, and forecasting.